Accounting Answers

A. Prepare bank reconciliation for Vahnidosa Beauty Essentials for the month of October 2021 using adjusted balance method.

• Book balance - 42,500.00
• Bank Statement Balance - 57,000.00
• Outstanding Checks - 42,000.00
• Deposit in Transit - 30,000.00
• Interest Income - 9,500.00
• Bank Service Charge - 1,500.00
• Returned Customer Check - 5,000.00
• Bank charge for new checks - 450.00

TOPIC: BANK RECONCILIATION

Directions: Research for the following questions and answer concisely using less than 5 sentences for each response.

1. Why are NFS Checks considered a debit memo?

2. Is a certified check considered to be an outstanding check?

A. Identify the word/s described in each statement.

1. The most liquid form of asset which is vulnerable to fraudulent activities.
2. The type of account which intends to provide account holders an incentive to save money.
3. The document used by the bank account holder in depositing cash/check in the bank.
4. This account is maintained by a passbook.
5. This accounts earns no interest where transactions are maintained by a check.

A. Identify the word/s described in each statement.

1. Unique identifier given to by the bank for every account opened or maintained.
2. It is a document that orders a bank to pay a specific amount of money from a person's account to the person in whose name it has been issued.
3. It is a bank document/form that is reqyired whenever a depositor withdraws from his/her checking account.
4. A check issued by a corporation.
5. An acceptable form of payment other than hard cash.

(Ignore income taxes in this problem.) Allen Company's required rate of return is 14%. The company is considering the purchase of a new machine that will save $10,000 per year in cash operating costs. The machine will cost $40,000 and will have an 8-year useful life with zero salvage value. Straight-line depreciation will be used.

Explain at least 3 points the meaning of cost of capital and its relevance in a net present value (NPV) analysis.

(Ignore income taxes in this problem.) Allen Company's required rate of return is 14%. The company is considering the purchase of a new machine that will save $10,000 per year in cash operating costs. The machine will cost $40,000 and will have an 8-year useful life with zero salvage value.

Required:

i) Discuss the implications for project investment priority based on your answer in (i) and (ii).

(Ignore income taxes in this problem.) Allen Company's required rate of return is 14%. The company is considering the purchase of a new machine that will save $10,000 per year in cash operating costs. The machine will cost $40,000 and will have an 8-year useful life with zero salvage value.

Required:

i)     The company would like to use NPV to evaluate the project now. Compute the machine's NPV, assuming cost of capital is 10%. Would you recommend purchase of the machine? Explain.

(Ignore income taxes in this problem.) Allen Company's required rate of return is 14%. The company is considering the purchase of a new machine that will save $10,000 per year in cash operating costs. The machine will cost $40,000 and will have an 8-year useful life with zero salvage value.

Required:

i） Compute the machine's internal rate of return to the nearest whole percent. Would you recommend purchase of the machine? Explain.

(Ignore income taxes in this problem.) Allen Company's required rate of return is 14%. The company is considering the purchase of a new machine that will save $10,000 per year in cash operating costs. The machine will cost $40,000 and will have an 8-year useful life with zero salvage value.

Required:

i） Compute the machine's internal rate of return to the nearest whole percent. Would you recommend purchase of the machine? Explain.

ii)     The company would like to use NPV to evaluate the project now. Compute the machine's NPV, assuming cost of capital is 10%. Would you recommend purchase of the machine? Explain.

iii) Discuss the implications for project investment priority based on your answer in (i) and (ii).

A. Identify the word/s described in each statement.

1. Unique identifier given to by the bank for every account opened or maintained.
2. It is a document that orders a bank to pay a specific amount of money from a person's account to the person in whose name it has been issued.
3. It is a bank document/form that is reqyired whenever a depositor withdraws from his/her checking account.
4. A check issued by a corporation.
5. An acceptable form of payment other than hard cash.